GM to all of you nutcases. It’s Crypto Nutshell #975 bringin‘ the news… 🥜

We're the crypto newsletter that's more suspicious of the whole setup than a man who just watched a studio light drop out of a clear blue sky… 🎬📺

What we’ve cooked up for you today…

What’s in the Crypto Nutshell Portfolio?

BREAKING: Why Holding Anything But Bitcoin Has Been a Losing Bet for Two Years

Friday we asked where you stand on Bitcoin, and the vote was lopsided.

Nearly three-quarters of you leaned bullish, and just 4% thought this one fades.

Bitcoin spent the weekend proving you right, climbing from around $78,000 to above $81,000.

And a fresh report says the only version of that bullishness that's paid off in years is the one aimed at Bitcoin itself.

Over the two years to late August, Bitcoin is up 28%.

The median mid-cap altcoin is down 74% over the same stretch, and Ethereum has gone almost nowhere.

Glassnode and Bybit, who ran the numbers, call it the defining feature of this cycle.

The altseason rotation that usually follows a Bitcoin run, where money flows down into the smaller tokens, never showed up.

The reason is where the money went.

Spot Bitcoin ETFs have pulled in $55.2 billion, against $13.1 billion for Ethereum's funds and $29.7 million for Solana's.

The institutional bid was Bitcoin, almost to the exclusion of everything else.

And the leverage stacked up on the opposite side of that trade.

Bitcoin futures open interest runs about 2% of its market value, against 24% for the memecoin PEPE.

(Open interest is just the pile of leveraged bets riding on a token at any given moment.)

So the froth gathered in the smallest, riskiest corners while the safest asset did the heavy lifting on price.

The old crypto playbook was to buy Bitcoin, then rotate the gains into alts for the real upside.

For two years, that rotation has been a way to turn a 28% winner into a 74% loser.

The crowd's bullish, and this cycle only paid the narrow version of that.

The money was made owning Bitcoin, not rotating out of it. 🚀

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Lyn Alden reckons the whole market spent last week glued to a number that barely moves anything.

Alden is the founder of Lyn Alden Investment Strategy and one of the most respected macro analysts working today.

Here's what she posted:

The Fed delivered its first rate hike since 2023 last week, and crypto braced for a quarter of a percent.

Alden's read is that 25 basis points is a rounding error next to the force running the show.

(Fiscal dominance is when government debt and deficits get so big that the Treasury's borrowing needs, not the Fed, drive monetary conditions.)

Washington has to roll trillions in old debt and fund a deficit that isn't shrinking, and it can only do that if dollars keep flowing.

That flood swamps whatever the Fed nudges at the margin with its rate lever.

Which is why Bitcoin spent the weekend grinding higher, days after a hike that was meant to cool it.

A fixed 21 million coins doesn't care about 25 basis points, only about how many fresh dollars are chasing it.

So while everyone fixated on the Fed, the case for owning the one asset Washington can't print only got firmer.

The Fed's dial moves 25 basis points; Washington's moves trillions. 🎛️

Let's kick off the week with a look at the Bitcoin HODL Waves, one of the clearest snapshots of market conviction.

Each coloured band represents the percentage of Bitcoin that last moved within a specific time frame.

The warmer the colour, the younger the coins, with red showing Bitcoin that has been held for less than one day.

Today we're focusing on short-term holders (STHs), defined as coins held for less than six months.

Here's how the supply breakdown looks today compared to two weeks ago:

TL;DR: 19.01% of all Bitcoin is in the hands of short-term holders. 💎

Down from 19.20% two weeks ago, a 0.19% slip that ends three straight prints of growth.

The oldest short-term band did the work, with 3-6 month coins shedding 0.35% as they crossed the six-month line into long-term hands.

That's roughly 38,000 Bitcoin graduating out of short-term supply and into conviction.

Behind them the 1-3 month band swelled again, up 0.43% to 7.01%, the summer-breakout coins ageing forward without selling.

That single band now holds more than a third of the entire short-term float.

The front thinned too, the week-to-month cohort giving up 0.31%, so no fresh wave came in behind them.

The float is shrinking from the top, and it's shrinking because coins are getting older, not because they're being sold. 💎

Polymarket faced $10 million fraud attempt as its CEO pushed growth over compliance concerns: WSJ. A separate attack compromised nearly 500 user accounts using stolen personal information, according to the Wall Street Journal report.

Crypto platform Gemini's stock is down 80% from its IPO. That's reviving takeover speculation. Gemini's market value has fallen to about $753 million, drawing fresh attention to its licenses, custody infrastructure and customer base.

Visa Moves to Close Meme Coin Credit Card Rewards Loophole. JPMorgan scored a narrower win as Visa moves to stop memecoin purchases from earning credit card rewards after the Clarity Act failed.

Grayscale's Zcash ETF files for 3-for-1 forward share split. At the close of trading on Sept. 28, shareholders will receive two extra shares for each one they hold, lowering the per-share price.

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Select your answer below and you’ll be redirected to the results page. (answer explanation can be found after “Meme Corner”)

Because what would the crypto world be without its share of memes?

Trivia Answer: Two pizzas 🥳

On 22 May 2010, programmer Laszlo Hanyecz paid 10,000 BTC for two Papa John's pizzas, a swap now marked every year as Bitcoin Pizza Day.

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DISCLAIMER: The content of this newsletter is not financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and do your own research.